End Monopoly Of APMCs By Nudging Food Majors To Procure Directly From Farmers

If mandi boards bypass the agent network and support trade, farmers stand to benefit immensely

- Rajalakshmi Nirmal

This could be the right time for the Centre to nudge States to make their Agriculture Produce Market Committees (APMCs) play a more active role in primary market trade.

If the private sector engages in direct procurement from farmers now, the crowding in mandis can be checked effectively. This is imperative in maintaining the social distancing required to check the spread of the coronavirus.

At the time of peak arrivals, mandis witness hundreds of farmers, traders and labourers gathering to carry out the trade.

Many food companies including ITC, Britannia, Nestle, BigBasket, Cargill India, Patanjali, and Adani Group buy produce from farmers from across the country. But most do not make direct farm gate purchases; they channel them through the commission agent network. The role of the commission agent is to reach out to farmers, aggregate the produce, do a quality check per the buyer’s requirements and transport the stock to the buyer’s processing plant/warehouse.

Here, if this commission agent link is removed and replaced with farmer producer organisations (FPOs) for aggregation of produce and its transportation, and APMCs are brought in to do quality checks and take up counter-party risk, buyers may come forward to purchase directly from farmers. With the eNAM network established across the country, this should be possible now. But will States nudge their APMCs to act?

Scope of eNAM platform

There are already 800-plus FPOs on board eNAM. If traders such as ITC, Britannia and Cargill India onboard eNAM and purchase directly from the FPOs, it will reduce the footfall in mandis to some extent.